(a) A member of an LLC is entitled to dissent from, and obtain payment of the fair value, as determined under § 48-231-206, of the member’s membership interests in the event of, any of the following LLC actions:

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Terms Used In Tennessee Code 48-231-201

  • Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Business: includes every trade, occupation, profession, investment activity and other lawful purpose for gain or the preservation of assets whether or not carried on for profits. See Tennessee Code 48-202-101
  • Court: includes every court and judge having jurisdiction in the case. See Tennessee Code 48-202-101
  • Dissolution: means that the LLC has incurred an event under §. See Tennessee Code 48-202-101
  • Entitlement: A Federal program or provision of law that requires payments to any person or unit of government that meets the eligibility criteria established by law. Entitlements constitute a binding obligation on the part of the Federal Government, and eligible recipients have legal recourse if the obligation is not fulfilled. Social Security and veterans' compensation and pensions are examples of entitlement programs.
  • Fair value: means the value of the dissenter's membership interest of an LLC immediately before the effective date of the LLC action referred to in §. See Tennessee Code 48-231-101
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • LLC: means an LLC whose members have obtained rights to dissent under §. See Tennessee Code 48-231-101
  • Member: includes a former member when dissenters' rights exist because:
    (A) The membership of that former member has terminated causing dissolution. See Tennessee Code 48-231-101
  • Membership: means the rights and obligations a member has pursuant to a corporation's charter, bylaws and chapters 51-68 of this title. See Tennessee Code 48-51-201
  • Membership interest: means a member's interest in an LLC consisting of a member's financial rights, a member's right to assign financial rights as provided in §. See Tennessee Code 48-202-101
  • Operating agreement: means a written agreement described in §. See Tennessee Code 48-202-101
  • Person: includes individual and entity. See Tennessee Code 48-202-101
  • Property: includes both personal and real property. See Tennessee Code 1-3-105
  • Year: means a calendar year, unless otherwise expressed. See Tennessee Code 1-3-105
(1) Consummation of a plan of merger to which the LLC is a party;
(2) Consummation of a sale, lease, transfer, or other disposition of all or substantially all of the property and assets of the LLC not made in the usual or regular course of its business, but not including a disposition in dissolution described in § 48-245-501(d), or a disposition pursuant to an order of a court, or a disposition for cash on terms requiring that all or substantially all of the net proceeds of disposition be distributed to the members in accordance with their respective membership interests within one (1) year after the date of disposition;
(3) Except as provided in the articles or operating agreement in effect when the person becomes a member or placed in such agreement without the opposing vote of the member, an amendment of the articles or operating agreement that materially and adversely affects the rights or preferences of the membership interests of the dissenting member because it:

(A) Alters or abolishes a preferential right of the membership interests;
(B) Alters or abolishes a preemptive right of the owner of the membership interests to make a contribution;
(C) Excludes or limits the right of a member to vote on a matter, or to cumulate votes, except as the right may be excluded or limited through the acceptance of contributions or the making of contribution agreements pertaining to membership interests with similar or different voting rights; or
(D) Establishes or changes the conditions for or consequences of expulsion;
(4) An amendment to the articles or operating agreement that materially and adversely affects the rights or preferences of the membership interests of the dissenting member because it:

(A) Changes a member’s right to resign or retire; or
(B) Alters or abolishes a right in respect of the redemption of the membership interests, including a provision respecting a sinking fund for the redemption or repurchase of such membership interests;
(5) Any other LLC action taken pursuant to a member vote to the extent the articles, the operating agreement, or a resolution approved by the members provides that dissenting members are entitled to dissent and obtain payment for their membership interests.
(b) A member entitled to dissent and obtain payment for such member’s membership interest under this chapter may not challenge the LLC action creating such member’s entitlement unless the action is unlawful or fraudulent with respect to the member or the LLC.
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